Holiday experiences help travel operator Tui weather the heatwave storm
Travel operator Tui has reported double-digit sales growth for the full year, as strong performance in hotels and cruises outweighed the impact of the summer heatwave and airline strikes.
The figures
Reported core earnings rose 10.9 per cent from €1.10bn (£990m) to €1.14bn.
Revenues were up five per cent to €19.52bn.
Profit before tax fell to €972m from €1.08bn in 2017.
The company saw financial debt rise 26.4 per cent to €2.44bn.
Dividend per share increased 10.9 per cent to €0.72.
Why it’s interesting
Tui’s results come after a tough summer for travel operators, who have had to contend with high temperatures and airline strikes. Tui said it had delivered "strong performance in a challenging market environment”.
The positive sales growth was largely driven by strong performances in the group’s holiday experiences division. Tui said its hotel and cruise offerings account for roughly 70 per cent of earnings.
This outweighed disappointing results in its markets and airlines division, which the company said was due to prolonged hot weather in Europe over the summer and significant levels of airline disruption.
The results come after rival tour operator Thomas Cook reported a loss for the year as the heatwave and strikes took their toll.
But Tui, which was formed in 2014 after a merger between British Tui Travel and its German parent company Tui AG, has a more diversified benefited from a more diversified offering.
The company said it expects to deliver “superior annual earnings growth” of at least 10 per cent for the next financial year.
David Madden, market analyst at CMC Markets UK, said: “The travel sector across the board has had a difficult time as the unusually warm weather encouraged prospective holiday makers to stay at home.
“Given what has gone on in the travel sector lately, it was an impressive performance from Tui.”
Shares in Tui rose more than four per cent this morning.
What Tui said
Chief executive Fritz Joussen said: “We are investing, we are growing with Tui’s high-margin products and services and our businesses are increasingly scaling.
“Today, our own holiday experiences content account for more than 70 per cent of our earnings: hotels, cruises, excursions and destination activities.
“This enables us to clearly differentiate ourselves from the competition. With more than 20 million customers, use of state-of-the-art IT and intelligent customer systems, we have considerable potential for new business, turnover and earnings.
“We will continue our successful transformation: The next step will transform Tui into a digital and platform organisation.”